Global financial architecture: Past and present arguments, advice, action
AbstractIn the context of the formation of G-20, the paper points out the absence of reform in the global financial architecture (GFA) after the East Asian crisis, and assesses factors that can improve the chances of real reform this time. A factual assessment of various causes advanced for the global crisis, puts the main responsibility on lax regulation. Liquidity created by current account imbalances was tiny compared to endogenous amplification of liquidity in the financial sector. Emerging markets needed reserves as self-insurance in the face of volatile cross border flows. Even so global imbalances increase risk. The paper summarizes the Chimerica debate and the blocks that have stalled progress in resolving the issue. It argues that symmetric and balanced reform, at individual country and international level, is required to remove the blocks. Deeper governance reforms will make it feasible. Potential contributions of the G-20 are outlined. It is argued that India is a useful example of flexible but managed exchange rates that allowed market deepening and export growth.
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Bibliographic InfoPaper provided by Indira Gandhi Institute of Development Research, Mumbai, India in its series Indira Gandhi Institute of Development Research, Mumbai Working Papers with number 2009-004.
Length: 19 pages
Date of creation: Jun 2009
Date of revision:
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More information through EDIRC
Global Financial architecture; Crisis; G-20; Imbalances; Over-saving;
Other versions of this item:
- Ashima Goyal, 2009. "Global Financial Architecture : past and present arguments, advice, action," Finance Working Papers 22932, East Asian Bureau of Economic Research.
- Ashima Goyal, 2009. "Global Financial Architecture: Past and Present Arguments, Advice, Action," Working Papers id:2130, eSocialSciences.
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-02-20 (All new papers)
- NEP-FMK-2010-02-20 (Financial Markets)
- NEP-SEA-2010-02-20 (South East Asia)
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- Ashima Goyal, 2010.
"The Future of Financial Liberalization in South Asia,"
Finance Working Papers
22051, East Asian Bureau of Economic Research.
- Ashima Goyal, 2010. "The Future of Financial Liberalization in South Asia," Finance Working Papers 21973, East Asian Bureau of Economic Research.
- Ashima Goyal, 2010. "The Future of financial liberalization in South Asia," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2010-022, Indira Gandhi Institute of Development Research, Mumbai, India.
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